Expense categories that actually mean something
Twelve crisp categories beat forty-seven precise ones. Here's a framework you can hold in your head for years.
4 min readPublished May 2, 2026
Start from the question, not the receipt
Categories exist so you can answer questions about your money. "Am I eating out too much?" needs a Dining category. "Are my fixed costs creeping?" needs a Housing-and-utilities bucket. If a category doesn't answer a question you'll actually ask, delete it.
Twelve is enough; thirty is too many
More categories doesn't mean more insight — it means more noise and slower entry. Aim for ten to twelve top-level buckets that cover ninety percent of your spending. Use one Other bucket for the long tail. Resist the urge to split until you can prove the split changes a decision.
Distinguish fixed, variable, and discretionary
Even with ten buckets, mark each one as fixed (rent, subscriptions), variable (groceries, fuel), or discretionary (dining out, hobbies). When income drops, the variable bucket bends and the discretionary bucket cuts — fixed is the one you have to negotiate. The tag is more useful than the bucket name itself.
Rename once a year, then stop
Categories drift as life changes — you got married, you took up a sport, you moved. Once a year, in January, prune and rename. The rest of the year, leave them alone. Frequent re-categorising makes trend comparisons impossible.